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in
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SPONSOR |
SJC |
DATE TYPED |
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HB |
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SHORT
TITLE |
Child Support Enforcement Changes |
SB |
48/SJCS |
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ANALYST |
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REVENUE
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Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY04 |
FY05 |
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See
Narrative |
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Relates to HB 392 and HB 470
LFC Files
Responses
Received From
Human
Services Department (HSD)
Office
of the Attorney General (AG)
SUMMARY
Synopsis of Bill
Senate
Judiciary Committee Substitute for Senate Bill 48 proposes to change the
The bill specifically
provides that a CSED attorney "employed to provide Title IV D services represent
only the department's interests and that no attorney-client relationship exists
between the attorney and another party”.
Significant Issues
The
bill:
q Reduces the Interest
Rate for Delinquent Child Support to 4%; Refer to “Technical Issues” below.
q Changes the Statute of
Limitations for Paternity (no later than 12 years after the birth of a child);
q
Changes
the Statute of Limitations for Past Child Support Claims (12 years);
q
Establishes
an Arrears Management Program to provide amnesty for child support arrears.
Interest
accrues on delinquent child support at a rate in effect when the support
payment becomes due and shall accrue from the date the support is delinquent
until the date the support is paid or consolidated in a judgment. The current interest rate is 8 ¾ %.
The
manner in which interest rates are calculated creates the following issues:
q Creates
a disincentive for any payment of child support payments because the total
amount (interest plus principal) is difficult to pay-off.
q The
amount of interest owed usually is the limiting factor in license revocation
proceedings for return of the license.
q
Calculation of interest (including
various interest rates) by CSED is an expensive and burdensome process in
conjunction with the judicial proceedings associated with child support.
HSD is given the power
to forgive the interest payment if the department believes it is likely to
result in the collection of more child support.
HSD is also authorized to return suspended licenses to promote increased
collection of delinquent support. The
proposed changes will give HSD tools to work with parents that owe child
support to collect arrears or work-out payment options for non-custodial
parents.
In summary, the
interest rate reduction, Arrears Management Program and statute of limitations
change are all-powerful tools for the CSED to use in negotiating child support
cases.
FISCAL IMPLICATIONS
The amount of interest accrued during State
Fiscal Year 2003 was:
The amount of interest collected and distributed
during State Fiscal Year 2003 was:
With both the reduced interest rates and an
Arrears Management program, it is anticipated that
Additional costs are
as follows:
q
$2,200 programming changes
q
$23,200 public campaign to advertise
changes
The Department should
report through the interim committee process the changes in collections in the
upcoming year in order to evaluate the effect of these changes.
ADMINISTRATIVE IMPLICATIONS
There will be some initial costs associated with
the programming changes to the CSED computer system (the Child Support
Enforcement System-CSES). These are
considered to be very negligible compared to the savings in time for workers in
calculating interest.
If the
bill substitute becomes law, the CSED will have to
develop some formal internal procedures for how field staff will implement
it. The cost of this will be minimal.
Minimal impact to the
court system will be felt by the proposed changes since the action will mainly
be done by CSED administratively. New
orders would simply follow the new 4% interest rate. The Administrative Office of the Courts can
assist in any training issues that would occur for District Courts in their
regular training schedule.
CONFLICT
A
provision of the bill (p. 5, lines 12-13) may conflict with the Parental
Responsibility Act, §§ 40-5A-1 through 40-5A-13 as per the AG.
TECHNICAL ISSUES
The bill tracks the
language in HB 392 except for Section 56-8-4 Judgments and Decrees- Basis of Computing
Interest. HB 392 includes the following
language in Section 56-8-4 A (3)
q
“the judgment is based on unpaid child support, in which case
interest shall be computed at the rate of four percent”. This language supports the language in
Section 40-4-7.3.
The sponsor may wish
to include the same language as this will keep the two sections described above
consistent.
AG listed the
following concerns with the bill:
q
A provision of the substitute (p. 5,
lines 12-13) may conflict with the Parental Responsibility Act, §§ 40-5A-1
through 40-5A-13.
q
An amnesty program for delinquent child
support may implicate Art. IV, Sections 32 and 34 of the
q
Federal
law requires as a condition of receiving federal funding that states provide
assistance in obtaining support for all children for whom support is
requested. A child support enforcement
action may be brought on behalf of a family that receives assistance under the
Public Assistance Act or a non-assistance family. When the state brings the action to enforce
child support on behalf of a family that receives public assistance, the state
is seeking, inter alia, reimbursement for the public assistance benefits paid
out to support the child in the absence of child support. Section
q
A child support enforcement action may be
brought on behalf of a non-aid family. Section
BD/yr:dm